Reporting the Value of USDA Foods
Nutrition Services Division Management Bulletin
Purpose: Policy, Action Required, Beneficial Information
To: Public School Districts and County Offices of Education Receiving U.S. Department of Agriculture Foods
Attention: Child Nutrition Operators and Chief Business Officials
Date: March 2018
Reference: Title 2, Code of Federal Regulations, Section 200.502(g) and Part 200, Appendix VII, Item C; Title 7, Code of Federal Regulations, Section 250.58(e); U.S. Department of Agriculture Policy Memorandum FD 104: Value of USDA Donated Foods for Audits (Revised); U.S. Department of Agriculture Policy Memorandum SP 60-2016: Indirect Cost Guidance; California School Accounting Manual, Procedure 915, Indirect Costs
Subject: Reporting the Value of U.S. Department of Agriculture Foods in the Calculation of the Indirect Cost Rate
In accordance with Title 2, Code of Federal Regulations (2 CFR), Part 200, Appendix VII, Item C, the California Department of Education (CDE) and the U.S. Department of Education negotiated to include food costs in the indirect cost rate. The CDE recognizes that the U.S. Department of Agriculture (USDA) Policy Memorandum SP 60-2016: Indirect Cost Guidance, instructs school food authorities (SFA) to exclude food costs from the indirect cost rate; however, the CDE negotiated restricted indirect rate supersedes this policy guidance. SFAs are instructed to follow the California School Accounting Manual (CSAM) accounting procedures on how to properly account for their food costs. Additionally, this management bulletin instructs SFAs that they must value the USDA Foods received each program year at their fair market value.
Valuation of USDA Foods
In accordance with 2 CFR, Section 200.502(g), USDA Foods must be valued at either fair market value at the time of receipt (excluding nonfood items) or by using one of the following USDA Foods valuation methods included in Title 7, Code of Federal Regulations, Section 250.58(e):
- The cost per pound of USDA Foods using the annual prices posted by the USDA, which are found on the USDA Food Distribution Processor Material Prices Web page at https://www.fns.usda.gov/fdd/processor-material-prices.
- The most recently published cost-per-pound price in the USDA Foods catalog at the time of an order found in the Food and Nutrition Service electronic USDA Web-based Supply Chain Management (WBSCM) system.
- The average of each USDA Foods price based on the state’s USDA Foods orders in WBSCM. To calculate the average, all prices for a particular USDA Foods are averaged together to get an average cost per pound for the item for the current fiscal year. The CDE uses this valuation method for USDA Foods prices in the Child Nutrition Information and Payment System, which can be accessed from the Statement of Commodities Shipped Report.
For additional information on how to report the value of USDA Foods when calculating the indirect cost rate, refer to the CSAM, Procedure 915, Indirect Cost Rate.
For questions regarding the valuing of USDA Foods, please contact Amy Bell, Child Nutrition Consultant, Food Administration Unit, by phone at 916-322-5051 or by e-mail at firstname.lastname@example.org.
For questions regarding indirect cost rate determinations, please visit the CDE Frequently Asked Questions about Indirect Costs Web page at https://www.cde.ca.gov/fg/ac/ic/icrfaq.asp or e-mail the CDE Financial Accountability and Information Services Office at email@example.com.